The truth about the voluntary sector and the state

Charlotte Stuffins blogs about policy. Charlotte no longer works for NCVO but her posts have been archived on this site.
 
All figures in this post are from the 2012 NCVO Almanac, using data from 2009/10 – the most up-to-date figures available. This blog is based on the findings from:
 
• Question 18 ‘What is the voluntary sector’s involvement in public service delivery?’ • Question 24 ‘How big is the voluntary sector compared to the rest of the economy?’ • Question 33 ‘What are the main trends in statutory funding?

Disclaimer before reading

Three-quarters of all voluntary organisations do not actually receive any income from statutory sources (funding that comes from a government source). And almost two-thirds of charities haven’t even applied for money (grants or contracts) from national statutory bodies over the last five years.

In fact, most statutory funding is payment for the delivery of public services – in areas such as housing, health and social care, employment training and offender rehabilitation.

How much do charities get from the government?

Around 41,000 voluntary organisations have a financial relationship with the state. Yet this figure is sometimes misconstrued, particularly with accusations of financial dependency. Whilst NCVO has previously presented data to dispel this myth , we now have more up-to-date information on the reciprocal relationship between the state and the voluntary sector.

At the last count, the voluntary sector received over a third (38%) of its funding from statutory sources, which amounts to £13.9billion. Whilst this figure might sound like a lot, to put it into context, it is:

• Only 2% of government spending (£666bn) • Less than one seventh of the amount spent on the NHS (£100.2bn) • Less than half the amount spent on debt interest payments (£30.95bn)

And when this is compared to the amount of revenue generated by individual companies in the private sector, £13.9bn pales in comparison:

• Lloyds TSB’s revenue is over triple this amount (£43.45bn) • Tesco’s revenue is over two and a half times this amount (£38.6bn)

Has this amount changed?

Yes – in fact it has increased by 61% in real terms over the past decade.  Since 2000, the voluntary sector’s statutory income has actually grown faster than total public spending.

But our analysis does indicate that given the current financial situation, this figure is likely to be the high water mark for the foreseeable future.

Much of this growth has been driven by contracting – with over three-quarters (78.4%) of statutory income coming via contracts as opposed to grants. This suggests that the voluntary sector has become a more important economic contributor and a real player in the provision of public services.

Who gets the most funding?

Below are the four sub-sectors that receive more than half their income from statutory sources:

1. Employment and training (75%) 2. Law and advocacy (58%) 3. Social services (56%) 4. Umbrella bodies (51%)

And the social work sub-sector delivers the most public services by far. Health and social care employs over half the VCS workforce (57%), which is 437,000 people – roughly equivalent to the population of Liverpool (441,100).

Do bigger organisations get more statutory funding?

On the whole – yes.

In fact, over four-fifths (81%) of the sector’s statutory income is received by organisations with an annual income of £1million or more. Small and micro organisations – almost 139,000 in number – receive only 3% of the total statutory income to the sector.

Want to know more?

All of this (and much much more) is in The UK Civil Society Almanac 2012, which can be purchased here  or viewed at data.ncvo-vol.org.uk.

Charlotte Stuffins

NCVO Policy Team’s blog

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